7/15/2008 @ 12:40PM

'Giant Sucking Sound,' Part Deux

During his first run for president, billionaire Ross Perot famously warned that the North American Free Trade Agreement would create a “giant sucking sound” by vacuuming away American jobs. Sixteen years later, he’s worried that out-of-control spending and the current presidential contenders are sucking away hope of addressing the giant pile of federal debt.

“We only have a few years left to get our financial house in order,” says Perot. He points to the massive federal debt load, already $9.4 trillion. The problem will only grow worse as the first baby boomers begin collecting Social Security and Medicare benefits.

Perot, 77, says neither John McCain nor Barack Obama is adequately addressing the issue of U.S. debt. The two-time Presidential candidate declined to say which of the two he’d like to see in the White House next year.

Analysts say tax plans of both candidates will throttle tax collections and point to even greater deficits. According to a study by the Tax Policy Center, McCain’s tax policies would lower tax revenues by $3.6 trillion over the next decade. Obama’s policies would lower them by $2.7 trillion over the same period.

Nor does Perot believe either candidate has dealt with the issue of mandatory spending. While discretionary spending, including defense, must be approved annually by Congress through appropriations bills, mandatory spending–for things like Social Security and Medicare–carries on year after year, as dictated by prior law. According to the Heritage Foundation, a conservative think thank, discretionary spending has risen 152% since 1965. Mandatory spending has risen 759%.

“The annual increases are largely on autopilot, so that no one has to vote for or against them each year,” Perot says

Perot led a surprisingly strong independent bid for the White House in 1992. He won 20 million votes in a three-way race with George H.W. Bush and Bill Clinton on a campaign calling for a balanced federal budget.

Perot funded the campaign (and another one in 1996) mostly out of his own pocket, an easy feat for the Forbes 400 member we estimated to have a net worth of $4.3 billion in March. The Texan made his fortune by founding the information technology companies
Electronic Data Systems
and
Perot Systems
.

Although there was a brief run of balanced federal budgets while Bill Clinton was in the White House, big deficits quickly returned under George W. Bush. The Treasury Department recently announced that the deficit jumped to $269 billion during the first nine months of the budget year, up 122% from $121 billion recorded during the comparable period a year ago. Perot says that’s why he recently launched the Web site PerotCharts.com–to highlight the growing problem.

He isn’t the only billionaire with that on his mind this election season. Peter G. Peterson, 82, is spending $1 billion to establish a foundation to spur action on the deficit and other issues. Peterson is the co-founder of the asset manager
Blackstone Group
.

And hold on to your popcorn, because Peterson’s foundation will soon screen what’s sure to be a thriller: a documentary about America’s deficit, called I.O.U.S.A., in about 400 theaters. The hope is to get people to talk about fiscal responsibility the same way Al Gore’s An Inconvenient Truth got people talking about the environment.

That may be a bit optimistic, considering most polls show Americans are more concerned about the economy, energy costs and education than deficit spending.

Perot has words for these people: “These candidates will be asking for your vote during the next four months. Ask them what they plan to do about the approaching financial problems.”